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A trade complaint filed against China’s solar manufactures three weeks ago has forced members of the U.S. solar industry to take sides. A group of 25 manufacturers and installers, including SunEdison and SolarCity on Tuesday said they are banding together to oppose the complaint.

The formation of the group, called the Coalition for Affordable Solar Energy (CASE), is the latest twist in a fight over complex issues about fair competition and the role of government subsidies. The trade complaint, filed by a group led by SolarWorld, contends that Chinese solar panel makers – which receive hefty financial support of the Chinese government – have been flooding the U.S. market with products at unfairly low prices. SolarWorld’s group is asking the U.S. International Trade Commission and the Commerce Department to investigate Chinese silicon solar cell and panel makers and impose duties on what they export to the United States (solar cells are assembled to form solar panels).

UPDATE: The SolarWorld-led group has since petitioned to change the scope of the complaint to include solar panels that are not made in China but contain Chinese solar cells, said Kevin Lapidus, general counsel of SunEdison, during a press conference Tuesday afternoon.

The trade complaint has materialized at a time when solar manufacturers worldwide are struggling. The global solar market has been marked by a glut of solar panels, and their prices have fallen by 30-40 percent this year. The oversupply has come largely as a result of countries such as Germany and Italy, which are the biggest solar markets, that cut their incentives for installing solar. The weak European financial market also has made it more difficult for developers to line up project financing. Prices for solar panels have gotten so low that analysts believe some companies are selling at a loss.

Some manufacturers that can’t compete, such as Solyndra, have filed for bankruptcy while others, including SolarWorld, have shuttered factories or scale back production. At the same time, lower panel prices have helped to reduce the cost of solar electricity and make solar projects more attractive in growing markets such as the United States and India.

The new coalition called the trade complaint “short-sighted” and said it could lead to higher-priced solar panels and disrupt the growth of the U.S. solar market. The same sentiment has been expressed by other installers since the SolarWorld-led group filed the complaint last month.

“Oversupply is good for you and me,” said Danny Kennedy, founder of California-based solar service provider Sungevity, during a green tech conference in California last week. Sungevity is a member of the coalition. “We shouldn’t see (cheaper solar panels) as a threat but an opportunity. We are doing what we are meant to be doing, which is to make solar cheap and affordable.”

The coalition also includes manufactures such as silicon wafer producer MEMC Electronic Materials and the American operations of China-based solar panel makers: Suntech Power, Trina Solar and Yingli Green Energy. Project developer Recurrent Energy (bought by Sharp last year) and solar financial service provider SunRun also are members.

The group led by SolarWorld, called the Coalition for American Solar Manufacturing (CASM), has attracted support as well. The group on Monday said the United Steelworkers is taking its side, along with about 75 other companies, including solar manufacturers and installers. Germany-based SolarWorld, which has a factory in Oregon, is the only manufacturer out of the original seven that has publicized its involvement in the petition. The six other manufacturers who jointly filed the complaint have yet to disclose their identities.

The whole dispute reflects an anti-China sentiment that has been simmering for a while. The global solar industry has been growing fast in the last five years, and that has fueled huge factory expansion plans from not only Chinese manufacturers but also those in the United States, Germany and Japan. Many of them, including Arizona-based First Solar and Suntech, have moved from owning hundreds of megawatts of factories to more than a gigawatt.

The strong and unrivaled support by the Chinese government – via loans, lines of credits, tax incentives and land – has helped to make China the global hub of solar cell and panel manufacturing. Some of Chinese manufactures have risen to be among the top 10 solar manufacturers in the world. For the past few years, competitors have questioned whether Chinese government has unfairly propped up its solar industry and made it possible for Chinese companies to significantly undercut their rivals.

Part of SolarWorld’s complaint is that the Chinese government hasn’t been forthcoming about the extent of its subsidies. As a member of the World Trade Organization, China is supposed to disclose its subsidies regularly so that other countries could decide how to respond and determine whether those subsidies unfairly enable certain companies to grab market shares.

The trade complaint has drawn some strong reaction from other Chinese companies and the Chinese government. CECEP Solar Energy Technology has threatened to hold back what it said is a $500 million investment to build solar power projects in the United States. A state-run newspaper in China published a front-page editorial that called the trade complaint a sure sign of jealousy.